The Wall Street Bull in New York. US stocks rose on Friday as concerns about recession hitting the economy reduced. Getty Images
The Wall Street Bull in New York. US stocks rose on Friday as concerns about recession hitting the economy reduced. Getty Images
The Wall Street Bull in New York. US stocks rose on Friday as concerns about recession hitting the economy reduced. Getty Images
The Wall Street Bull in New York. US stocks rose on Friday as concerns about recession hitting the economy reduced. Getty Images

US stocks end higher after steep losses during week on recession fears


Fareed Rahman
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US stocks ended higher on Friday, recovering from steep losses at the start of the week on ebbing fears of a recession hitting the world’s largest economy.

The Dow Jones Industrial Average closed 0.13 per cent higher at 39,497.54, while the S&P 500 jumped 0.47 per cent to 5,344.16. The Nasdaq Composite rose 0.5 per cent to 16,745.30.

Globally, Japan's Nikkei Index rose 0.56 per cent, while Hong Kong's Hang Seng index jumped 1.17 per cent. In Europe, the FTSE 100 Index rose 0.28 per cent.

Stock markets remained volatile during the week, with Wall Street posting its worst day since 2022 on Monday, on fears of a US recession, an unexpected interest rate increase in Japan and fears of a broadening of the Israel-Gaza war.

However, Wall Street recovered losses on Thursday, after new data on the US labour market calmed fears of a recession.

“The markets attempted once again to push stocks into an upward trajectory after a short-term decline fuelled by renewed recession fears in the US,” Rania Gule, senior market analyst at XS.com, said on Friday.

“Market flows have begun to return to normal somewhat, with indices trying to regain lost strength.”

A US labour market report on Thursday showed initial jobless claims were lower than expected, indicating fears of a recession were premature.

Last month, the Federal Reserve chairman Jerome Powell said the US central bank could cut interest rates as soon as September. AP
Last month, the Federal Reserve chairman Jerome Powell said the US central bank could cut interest rates as soon as September. AP

Initial claims fell to 233,000 for the week ending on August 3, the Labour Department reported, lower than the forecast of 241,000.

The report carried greater significance than it typically would after another report earlier in the month showed the unemployment rate had unexpectedly risen, with the US economy adding only 114,000 jobs in July, far below the expected 175,000.

That unnerved global markets, as investors feared the Federal Reserve had fallen behind the curve on cutting interest rates and that the economy could be on a prolonged downturn. Market volatility also spread to other markets in Europe, Asia and the Middle East.

“The lower initial unemployment numbers helped ease recent slowdown fears among investors” after earlier US employment data “spurred strong risk-avoidance in the markets”, Ms Gule said.

The US appears to be moving towards cutting interest rates after making progress in taming inflation.

Last month, the Federal Reserve chairman Jerome Powell said US central bank could cut interest rates as soon as September, nearly completing the Fed's policy cycle after leaving rates unchanged for almost a year.

“We’re getting closer to the point at which it’ll be appropriate to reduce our policy rate, but we’re not quite at that point,” he said.

He also acknowledged the “considerable progress” made in taming inflation, while also saying the labour market is continuing to move into balance.

“There is going to continue to be a significant amount of uncertainty and anxiety hanging over the market for the course of the next month until we get to the next Fed meeting,” Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, told Reuters.

The market will be closely watching a new set of inflation numbers at the producer and consumer levels, scheduled for release next week that will further provide information on the trajectory of the US economy.

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Fixtures and results:

Wed, Aug 29:

  • Malaysia bt Hong Kong by 3 wickets
  • Oman bt Nepal by 7 wickets
  • UAE bt Singapore by 215 runs

Thu, Aug 30: 

  • UAE bt Nepal by 78 runs
  • Hong Kong bt Singapore by 5 wickets
  • Oman bt Malaysia by 2 wickets

Sat, Sep 1: UAE v Hong Kong; Oman v Singapore; Malaysia v Nepal

Sun, Sep 2: Hong Kong v Oman; Malaysia v UAE; Nepal v Singapore

Tue, Sep 4: Malaysia v Singapore; UAE v Oman; Nepal v Hong Kong

Thu, Sep 6: Final

If you go

The Flights

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Updated: August 10, 2024, 7:23 AM`